Estate tax is levied against someone’s estate upon death and is based on the size of the total estate. Inheritance tax is levied against the heirs of an estate.
It is the responsibility of the surviving spouse or the estate’s executor to notify lenders on joint accounts, to close out accounts in the deceased’s name, and to notify the three major credit agencies.
Studies have shown that some heirs ultimately end up in worse financial shape after receiving an inheritance. This is so common that psychologists call it sudden wealth syndrome, although it is not an actual psychological diagnosis.
Trusts can be an essential part of your plan—but they are often complex and time-consuming to set up.
The mechanics of estate planning can be easy enough, but the big picture requires a lot of thought and soul searching.
Passing on your story provides something deeper than wealth.
Widows and widowers whose spouses were younger than 72 at the time of death need to examine their options carefully before rolling over their spouse’s IRA.
The new rule for adults who inherit an IRA from their parents in 2020 and beyond is that they must liquidate that account within 10 years.
When Inheriting an IRA there are complex rules you will need to follow to avoid costly errors.
A premium bond has a coupon rate higher than the prevailing interest rate for that particular bond maturity and credit quality. A discount bond, in contrast, has a coupon rate lower than the prevailing interest rate for that particular bond maturity and credit quality.
The difference can be summed up in two words: intraday trading. Unlike mutual funds, ETFs can be bought and sold anytime throughout the day.
529 plans can be a good option for both college and K‑12 savings. But to avoid paying taxes or early withdrawal penalties, it’s vitally important to keep up with any changes to the rules.
There is a way to get a partial deduction for money that will eventually go to your children. A charitable lead annuity trust gifts money to a charity first, and then passes assets to your beneficiaries.
A better overall strategy is to invest for total return.
Income earned by one spouse can be used to fund retirement accounts for both spouses.
Even if the probability of success for a 4% withdraw rate is less than some thought, it’s still strong when your portfolio is monitored actively.
Don’t overlook these benefits.
And what should you do if you have forgotten to file Form 8606?
The major components to life expectancy are genetics and lifestyle.
An investment option you may not have considered.